Pricing biologics: Issues, strategic priorities and a conceptual model

Abstract

The advent of complex and often expensive biologics raises critical commercial challenges – the most important of which pertains to developing a viable pricing, distribution and reimbursement model that is intrinsically geared to the special characteristics of biologic products and the expectations of a diverse customer population. Idiosyncratic differences in health-care systems, their philosophical motivations and preferred methods of controlling access to expensive biologic treatments pose additional challenges. This article discusses key issues about pricing biologics from the primary viewpoint of biologic manufacturers and marketers, focusing on the inseparable relationship between price, distribution, access and reimbursement. Specific priorities are explicated for streamlining biologic pricing and access strategies to meet upcoming challenges. A conceptual model for developing viable biologic pricing strategy is presented. Insights from the author's work implementing key aspects of the model in the real world are discussed. The article concludes by presenting an overview of a pricing decision support system that has proven invaluable in formulating and managing biologic pricing strategies over a finite time horizon.